Thursday, June 25, 2009

Enough about that philandering governor to the South. It's time once more for the continuing saga of the banking debacle in the Queen City.On Thursday, it was Ben Bernanke's time to sit on the hot seat before Congress to explain his role in the Bank of America/Merrill Lynch smash-up that masqueraded at first as a BofA takeover. Lawmakers grilled Bernanke over the details of the deal. But what they really wanted to know was this: Was it true what BofA CEO Ken Lewis said? Did federal regulators (meaning the Federal Reserve, meaning you, Ben Bernanke) threaten to oust Lewis and the bank's board members if BofA backed out of the Merrill deal after learning of mounting losses?Nope. “I never said that I would replace the board and management” if Lewis decided to invoke a clause in the acquisition contract to try to stop the deal, Bernanke told the committee.Bernanke also denied that he or any other Fed official urged Bank of America to keep quiet about Merrill Lynch's financial problems. Failing to divulge what he knew about Merrill's troubles would violate Lewis' fiduciary duty to Bank of America's shareholders.“Neither I nor any member of the Federal Reserve ever directed, instructed or advised Bank of America to withhold from public disclosure any information relating to Merrill Lynch, including its losses, compensation packages or bonuses or any other related matter,” It was Bernanke's first public response since the committee launched an investigation into whether he or other government officials bullied Bank of America to stick with its plan to combine the two financial powers.Republicans weren't buying it, all but saying Bernanke, a Republican, was lying. But Democrats seemed to be in his corner, saying the investigation revealed that Fed officials thought Bank of America failed to properly review Merrill Lynch's finances.Ummm. Who do you think is lying - Ben or Ken? Vote here.

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The Observer's editorial board cares deeply about Charlotte and the Carolinas, and has a problem with public officials who have forgotten that they report to citizens. Editorial page editor Taylor Batten and associate editors Peter St. Onge and Eric Frazier tackle politics and public policy issues locally, across the state and nation. Kevin Siers tackles those issues too in cartoons. Read their columns and biographical information on the CharlotteObserver.com Opinion page.